The B2B platform for full-electric and plug-in hybrid electric vehicles: Industry News

Important truths about how the EV market will evolve in the next years have been revealed by a white paper published by the market research and consulting firm Pike Research. The report discusses the next key players in the car and battery market, compares costs between EVs and gasoline cars and analysis on whether battery swapping will be successful.

The “Electric Vehicles: 10 predictions for 2010” report explores hot topics in the EV world and assesses their impact on key industry players. It forecasts that the combined market for EVs, PHEVs and hybrid electric vehicles will represent around 2.5% in 2010. To manage the additional load of electrified vehicles, investments of billions of dollars are required in charging equipment and upgrading the power grid, the paper maintains. For 2015, it estimates more than 5.3 million charging locations around the world and an expanding battery market, mainly for lithium-ion batteries. With battery manufacturers gearing up for an electrified transportation era, where millions of battery cells and packs will be needed, the market will grow to a 5,5 billion euro (8 million dollar) industry.

In addition, Pike Research has identified 10 key trends as regards the future of electrified transportation that will influence the automotive industry and customers:

1. The cost of owning and driving an electric vehicle is not likely to be cheaper than using gasoline

Driving on electric power will only cost around one fourth of using gasoline as fuel. However, including the premium paid for a PHEV or EV and its batteries in the overall calculations, it is necessary to keep the electric car for 7 years and nearly fully deplete and recharge the batteries daily to become cost-competitive.

2. 2012 will be a critical year for the commercialisation of EVs and plug-ins

The financial support from governments in North America, Europe and Asia to stimulate supply and demand is likely to decline in 2012 and it will still remain to be seen whether consumers (and not only the early adopters) will still be interested in driving electric power. A higher competition and overcapacity in the battery market could drive down the prices. Therefore, the year 2012 could be a “make or break” period for the EV industry.

3. Despite the arrival of plug-in hybrids, the hybrid market will continue to grow by adding a greater variety of subcategories

Cars with a “stop-start” function, sometimes also called mild or micro hybrids, will be incorporated in dozens of new models. Ultracapacitors, that have a greater power density and longer life-cycle than li-ion batteries will be introduced in hybrid vehicles as well as li-ion batteries instead of NiHM batteries.

4. The plug-in hybrids of 2020 may not resemble the plug-ins of 2010

Pike Research states that automakers, having estimated that vehicle owners drive 13,000 miles per year, designed many of the first wave of plug-in hybrids with the ability to travel 30 miles or more on electric-power only. If a significant consumer audience fails to embrace the initial class of plug-ins because of the cost, it is likely that auto companies will shift to designing vehicles with shorter all-electric range, and smaller, less costly battery packs.

5. The Li-ion batteries sold with the first EVs may have little to no resale value

A steep decline in the cost of new batteries over the next years will impede the ability to resell the batteries sold in 2010-2011 and depreciate the residual value of EV batteries. Pike Research forecasts that the cost of li-ion batteries will fall by more than half from 1070 dollar per kWh in 2009 to 470 dollar per kWh in 2015.

6. Asia will be the dominant supplier and consumer of EVs and batteries

According to the report, more than 1 million electrified vehicles (including hybrids) will be sold in Asia during 2015. The Asian Li-ion battery market, powered by Japan, Korea, and China, is projected to surpass $4 billion in 2015, which will represent a 53% market share. China will be the largest player internationally, as the government has pledged to produce 500,000 electrified vehicles per year. The country’s expertise in cost-effective manufacturing will provide an advantage in ramping up domestic sales, as well as in selling internationally.

7. Battery swapping is not likely to be a significant industry

Battery swapping stations could cost around 350,000 euro each, while the location and size of the battery packs have to be standardised to ensure a fast exchange of batteries. The high equipment costs as well as the unlikely standardisation of batteries prevents this technology from being adopted widely. Auto industry executives have expressed strong reservations about battery swapping in the US.

The three last key trends regard the infrastructure:

• Operating commercial EV charging stations will not be a very significant or profitable industry
• The grid as a whole will accommodate and even benefit from EV charging, but some neighborhoods with multiple EVs could overwhelm transformers
• Vehicle to Grid services will be minimal in 2015 and beyond